REIT forecasts ‘significant portfolio growth’ potential

Publicly-quoted property investment fund, Irish Residential Properties REIT (I-Res) has the capacity to take on up to €300m of bank debt to further grow its portfolio and sees “strong growth opportunities going forward”.

In a trading update, covering the year to date, the company — the first of the new wave of such funds to specifically target the residential market — said its recent capital raising efforts (it raised net proceeds of around €204m from a share offering in March) will allow for “significant portfolio growth” and better economies of scale.

“We continue to see excellent performance of the portfolio and see strong growth opportunities going forward,” said chief executive, David Ehrlich.

“Rates in the debt market have decreased further and are at extremely attractive levels. As opportunities arise, we will be able to increase our yield significantly, based on a leveraged return as we use our 45%-50% target gearing.

“We are also, in addition to acquisitions, pursuing the potential development of a significant number of units where we have planning permissions,” he added.

During the period, I-Res used nearly €91m from its capital raise to complete the purchase of the Rockbrook portfolio, featuring mixed-use space (including nearly 300 apartments) in Sandyford, Co Dublin, and repaid €93m in previous borrowings.

The company said it has generated strong growth across all key performance metrics so far this year.

Average rental increases of 10%-15% were noted in the period, while net income for the quarter amounted to €2m. The total current value of the REIT’s asset portfolio amounts to €413.3m.


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